Cryptocurrency adoption levels have steadily gone up since the advent of Bitcoin in 2008. Ownership levels have been buoyed by an increase in the number of cryptos, providing the number of ways people trade cryptocurrencies and regulations.
Germany is among the leading world economies and has a mature investment market. Despite the crypto industry still being in relative infancy, these digital assets have already made considerable gains as an alternative investment class. The country is also home to many Blockchain startups, including the BISON crypto exchange.
Mirroring trends globally, young adults lead in crypto ownership in Germany. Also, similar to the rest of Europe, large institutional investors have a significant stake in crypto adoption.
A bi-annual survey by Ding, a leading fintech company, puts Germany’s crypto adoption at 8% in 2021.
This was much lower than the global average, which stood at 14% in late 2021.
However, a 2021 report by an online publisher called Finder puts the adoption levels at about 11%.
In Contrast, a report released in 2020 by Blockchain Research Lab discovered that 14.1% of Germans owned crypto.
Another 10.1% of the 3,059 respondents had owned crypto in the past. The survey was based on internet users only, which explains the difference from the other surveys.
Bitcoin is by far the most popular crypto in Germany. Ethereum, Ripple, Litecoin and Bitcoin Cash made the top 5 according to the report by Finder.
According to the report, 85% of the respondents held Bitcoin among those who owned crypto. Ethereum followed at 30% and Litecoin at 23%.
According to a 2021 report by Chainalysis, Bitcoin transactions make up about 28% of the crypto transaction volume in the country. Ethereum and wrapped Ethereum make up about 36% of the transaction volume.
There is also considerable stablecoin usage which stood at around 25% in 2021. Altcoin usage stands at about 8%.
Institutional investors spur these impressive numbers.
Crypto Adoption by Different Demographics
Just after the popularity of crypto shot up in 2017, a German retail bank called Postbank carried out a survey in 2018.
Of the 3,100 respondents polled, 29% believed that crypto was a desirable investment option.
The study found that about 6% of those adults between 18-44 years already owned crypto assets.
Another 14% were planning to buy crypto at that time.
According to research firm Statista, younger adults in Germany are more likely to own crypto.
The 18-34 age group were three times more likely to own crypto compared to adults above 35 years of age.
The survey was carried out in 2020 and involved 5,022 Germans.
A report released in early 2021 by Blockchain Report Lab shows that men dominate crypto ownership in the country.
68.7% of men owned or had owned crypto compared to about 31.3% of women
The report puts the average age of those who had heard about crypto at 38.1 years.
Crypto asset owners were also likely to be more educated. A majority had at least a university degree, while some had PhDs.
About 29.7% of respondents who had a university degree owned crypto.
In contrast, only 0.8% of respondents without a high school education owned crypto.
A large percentage of those who owned or had owned crypto earned a higher income.
55% of former or current crypto owners had a net income of €2,000.
Singles and married people represented a higher percentage of those who had ever owned crypto.
29% of the singles polled owned crypto.
About 41.7% of the married people owned crypto.
The report by Blockchain Research puts crypto awareness in the country at about 87%.
Crypto Regulations in Germany
The Federal Financial Services Authority (BaFin) has approached blockchain technology, including crypto assets, in a forward-thinking way. The German Financial Authority has set up frameworks to encourage crypto adoption, including amending the German Banking Act.
The German legislator has also worked on a framework to allow financial institutions to invest in crypto assets. The law has allowed the country’s financial institutions to put infrastructure in place to facilitate the professional trading of digital assets such as Bitcoin.
According to a study by CoinTelegraph in 2020, there’s an increase in fully regulated trading avenues for professional traders. A good example is the BSDEX. Other banking institutions have set up banks as a service platform (Baas) to enable their customers to access crypto assets.
In the early 2020s, about 40 German Financial intermediaries had already applied for a license from BaFin. This represents 2% of the 1800 country’s banks.
The Future of Crypto Adoption in Germany
Sparkasse, a leading German bank with a network of 376 small banks, is planning to roll out a crypto wallet and exchange for its 50 million customers.
The bank is looking forward to offering its clients digital currencies like Bitcoin and Ethereum. This follows a change of laws in the country.
With such developments, it’s expected that crypto adoption rates will accelerate.
The plan is to use accounts already in place to facilitate crypto purchases, meaning that clients will not need to register for new accounts.
A further 400 banks are now exposed to this trading segment. It’s expected that there will be an emergence of more crypto products that will spur crypto adoption in Germany.